Commercial Property Lease in Spain - FAQ
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A lot of people ask me how the Commercial Property Lease works in Spain, and although I am not a lawyer I will explain in general terms over a period of time how the system of leasing a restaurant works.
Today I am going to make a start by telling you what you get when you buy a lease. I’ll use my own business as a concrete example for purpose of demonstrating how it all works.
Categories of commercial property available for lease
- Bare local (just bare bricks - no plumbing or electrics and no floors, ceilings, plastering on walls or shop front). If you lease this type of property be prepared to spend a lot of cash on secondary building works.
- Empty local, but ready to move your furniture into, (no existing client base or history of successful trading).
- Local fully fitted for a specific purpose but currently not trading.
- Local fully fitted for a specific purpose and open, with an established client base, history of trading and ready to start straight away.
As my personal expertise is that of a restaurateur, I am going to give you a quick run down of how the Spanish Commercial Lease works for an up and running bar/restaurant.
My bar and restaurant business for example is currently advertised for leasing.
- Firstly I am asking 99,000 Euros as a one-off payment to buy everything other than the building itself. You are also buying the client base and the right to rent this business ad infinitum.
- Secondly there is a monthly rent to pay of 1,350 Euros.
Do I have to buy a new lease after 10 years has passed?
- No the purchase price of the lease is a one-off payment.
What does the purchase price of the 10-year Lease include in detail.
- The client base, which in my case has been built up over 20 years of trading.
- Everything other than the building itself:
- All the furniture.
- Cooking equipment: Oven, grille deep fryer, coffee machine and grinder plus loads of fridges and freezers etc.
- TV and surround-sound audio system.
- The fully enclosable awning, terrace heater and terrace furniture.
If and when you decide to leave the business, you have the option of selling the lease on. You are obliged to offer it firstly to the freeholder and if the free holder declines, you a free to sell it on the open market at a profit.
I hope that this post has clarified what you get for your money when you lease a restaurant under the Spanish system.
In my next post on leases, I shall talk more about what happens when you want to sell your lease on and also I shall talk about what you normally can and can’t do under the terms of a lease.
